Participe e Acompanhe

Portugal will go back to “regular monitoring procedure” after paying debt to the IMF

ECO News

30 November 2018

The IMF team is in Lisbon now, on what could be their last post-programme surveillance mission. If Portugal repays the debt to the IMF, it will be back to "regular monitoring", an IMF source told ECO.

Portugal will go back to having regular monitoring from the surveillance unit of the IMF if it is able to repay the loan it requested to that institution, in May 2011. ECO contacted an official IMF source, who noted that “Portugal will go back to the regular monitoring procedure the IMF applies to all other countries”. Post-programme surveillance unit’s evaluation missions to the country would, therefore, come to an end.

The IMF is in Lisbon this week, with the purpose of completing their 7th post-programme mission to the country.

The Prime Minister announced this Thursday that Portugal will repay, by the end of the year, the missing €4.7bn it still owes to the International Monetary Fund. This value represents 17% of the total of IMF’s loan – which was €26.3m. Besides, the loan repayment will also have a positive impact on the country’s financing costs.

Now, Portugal will be monitored within the framework of Article IV: which includes a yearly general evaluation mission to the IMF member country, from which a report is drafted and a staff report is presented to the board. However, there is generally another informal visit arranged, which may happen half-cycle.

According to Article IV Consultation, the IMF previews that the deficit will lower to 0.7% in contrast to April’s predictions, now in line with the government’s estimations. However, the economic growth is estimated to be lower now, at 2.3%. The mission in Lisbon also called for the attention on the state regarding pensions and public workers’ wages.